Ford, Alibaba to team up for online car sales in China

Ford and Alibaba, the world's largest retailer, have agreed to explore new ways to sell cars in China, including online, and cooperate on "solutions for sustainable mobility."

Under the three-year agreement, both companies will jointly explore areas of cooperation in China and around the world. Ford will cooperate with Alibaba’s four business units in operation system (AliOS), cloud computing (Alibaba Cloud), digital marketing (Alimama) and online retail (Tmall).

“China is one of the world’s largest and most dynamic digital markets. Collaborating with leading technology players builds on our vision for smart vehicles in a smart world to reimagine and revolutionize consumers’ mobility experiences,’’ said Jim Hackett, Ford president and CEO. Hackett announced the agreement with Simon Hu, president of Alibaba Cloud and AliOS at Alibaba headquarters in Hangzhou, China.

The first stage of the partnership will focus on changing how cars are sold, the companies said in a release.

Alibaba's multistory Tmall allows consumers to use their phones to browse through the cars in a physical store and choose to buy one or test drive it. The vehicle would be delivered to them on the ground floor.

Alibaba, based in Hangzhou, China, has online sales that exceed Wal-Mart, Amazon and eBay combined.

Bill Ford, the automaker's executive chairman, and CEO Jim Hackett are expected to attend an announcement Thursday in Hangzhou. It's the latest in a string of major announcements by Ford this week working to boost its profile in the world's largest auto market.

Ford has been trying to catch up with General Motors and Volkswagen in China.

Earlier this week Ford and Hackett said the Dearborn-based automaker will introduce more than 50 new vehicles in China by 2025, including eight all-new SUVs and at least 15 electric vehicles from Ford and Lincoln.

In addition, the new Zotye-Ford joint venture is planning to launch a range of affordable all-electric vehicles.

Both the Chinese government and market forces are accelerating trends that will ripple through the rest of the world.

For example, in September the Chinese government declared that about 10% of passenger vehicles sold there in 2019 will be zero-emission "new energy vehicles" and that standard rises incrementally each year thereafter.

Chinese officials say they will eventually ban gas-fueled vehicles.

Online sales of new vehicles have taken off much faster in China than elsewhere, partly because dealers don't have the political clout they have in the U.S. Last year, online vehicle sales in China totaled about $15 billion, and have grown at a compound annual rate of 65% since 2012, according to consulting firm Frost & Sullivan.

Ford and General Motors explored online sales in the U.S. in the late 1990s but ultimately backed down when dealers threatened legal action.

But if the Ford-Alibaba venture succeeds, the idea of online sales in the U.S. could gain new life, through Alibaba, Amazon or even some more traditional auto businesses such as AutoNation.